Standing Committee B

[Mr. Win Griffiths in the Chair]

Pensions Bill

Malcolm Wicks: I beg to move,
That— 
 (1) during proceedings on the Pensions Bill the Standing Committee shall, in addition to its first meeting on Tuesday 9th March at 9.30 a.m., meet— 
 (a) on that day at 2.30 p.m., and 
 (b) thereafter when the House is sitting on Tuesdays at 9.30 a.m. and 2.30 p.m. and on Thursdays at 9.30 a.m. and 2.00 p.m. 
 (2) the proceedings to be taken at the sittings shall be as shown in the second column of the Table below and shall be taken in the order so shown; 
 (3) the proceedings which under paragraph (2) are to be taken on any sitting shall (so far as not previously concluded) be brought to a conclusion at the time specified in the third column of the Table; 
 (4) paragraph (2) shall not prevent proceedings being taken (in the order shown in the second column of the Table) at any earlier sitting than that provided for under paragraph (2) if previous proceedings have already been concluded.

TABLE SittingProceedingsTime for conclusion of proceedings   9th March (9.30 a.m.)  Clauses 1 to 3, Schedule 1, Clauses 4 to 11, Schedule 2, Clauses 12 to 60, Schedule 3, Clauses 61 to 76, Schedule 4 and Clauses 77 to 80. —  9th March (2.30 p.m.)  Clauses 1 to 3, Schedule 1, Clauses 4 to 11, Schedule 2, Clauses 12 to 60, Schedule 3, Clauses 61 to 76, Schedule 4 and Clauses 77 to 80 (so far as not previously concluded). —  11th March (9.30 a.m.)  Clauses 1 to 3, Schedule 1, Clauses 4 to 11, Schedule 2, Clauses 12 to 60, Schedule 3, Clauses 61 to 76, Schedule 4 and Clauses 77 to 80 (so far as not previously concluded). — 11th March (2.00 p.m.)  Clauses 1 to 3, Schedule 1, Clauses 4 to 11, Schedule 2, Clauses 12 to 60, Schedule 3, Clauses 61 to 76, Schedule 4 and Clauses 77 to 80 (so far as not previously concluded).—  16th March (9.30 a.m.)  Clauses 1 to 3, Schedule 1, Clauses 4 to 11, Schedule 2, Clauses 12 to 60, Schedule 3, Clauses 61 to 76, Schedule 4 and Clauses 77 to 80 (so far as not previously concluded). —  16th March (2.30 p.m.)  Clauses 1 to 3, Schedule 1, Clauses 4 to 11, Schedule 2, Clauses 12 to 60, Schedule 3, Clauses 61 to 76, Schedule 4 and Clauses 77 to 80 (so far as not previously concluded).  8.00 p.m.  18th March (9.30 a.m.)  Clauses 220 and 221, Schedule 10, Clauses 222 and 223, Clauses 191 to 193, Schedule 9 and Clauses 194 and 195.—  18th March (2.00 p.m.)  Clauses 220 and 221, Schedule 10, Clauses 222 and 223, Clauses 191 to 193, Schedule 9 and Clauses 194 and 195 (so far as not previously concluded).  5.00 p.m.  23rd March (9.30 a.m.)  Clauses 81 to 83, Schedule 5, Clauses 84 to 123, Schedule 6, Clause 124, Schedule 7, Clauses 125 to 162, Schedule 8 and Clauses 163 to 177.—  23rd March (2.30 p.m.)  Clauses 81 to 83, Schedule 5, Clauses 84 to 123, Schedule 6, Clause 124, Schedule 7, Clauses 125 to 162, Schedule 8 and Clauses 163 to 177 (so far as not previously concluded).—  25th March (9.30 a.m.)  Clauses 81 to 83, Schedule 5, Clauses 84 to 123, Schedule 6, Clause 124, Schedule 7, Clauses 125 to 162, Schedule 8 and Clauses 163 to 177 (so far as not previously concluded).—  25th March (2.00 p.m.)  Clauses 81 to 83, Schedule 5, Clauses 84 to 123, Schedule 6, Clause 124, Schedule 7, Clauses 125 to 162, Schedule 8 and Clauses 163 to 177 (so far as not previously concluded).—  30th March (9.30 a.m.)  Clauses 81 to 83, Schedule 5, Clauses 84 to 123, Schedule 6, Clause 124, Schedule 7, Clauses 125 to 162, Schedule 8 and Clauses 163 to 177 (so far as not previously concluded).—  30th March (2.30 p.m.)  Clauses 81 to 83, Schedule 5, Clauses 84 to 123, Schedule 6, Clause 124, Schedule 7, Clauses 125 to 162, Schedule 8 and Clauses 163 to 177 (so far as not previously concluded). —  1st April (9.30 a.m.)  Clauses 81 to 83, Schedule 5, Clauses 84 to 123, Schedule 6, Clause 124, Schedule 7, Clauses 125 to 162, Schedule 8 and Clauses 163 to 177 (so far as not previously concluded). 11.25 a.m.  1st April (2.00 p.m.)  Clauses 178 to 190. 5.00 p.m.  20th April (9.30 a.m.)  Clauses 196 to 219.—  20th April (2.30 p.m.)  Clauses 196 to 219 (so far as not previously concluded). 8.00 p.m.  22nd April (9.30 a.m.)  Clauses 224 to 242, Schedule 11, Clause 243, Schedule 12, Clauses 244 to 248. 11.25 a.m.  22nd April (2.00 p.m.)  New Clauses, New Schedules and remaining proceedings on the Bill. 5.00 p.m.

I welcome you to the Chair, Mr. Griffiths. We know from your reputation that you expedite proceedings in a brisk and businesslike way. Not having discussed a Bill in Committee since the Learning and Skills Bill, I know that there is nothing quite as exciting as the start of Committee proceedings, except the end of them. However, that will happen in some weeks' time and we shall be gathered together for much of March and April—apart from the Easter break—to consider what we regard as an important Bill. We are honoured that 
not only you, Mr. Griffiths, but Mr. Cran, our other Chairman, will provide distinguished leadership. 
 I wish to thank my hon. Friend the Member for Northampton, North (Ms Keeble) and the hon. Member for Northavon (Mr. Webb) for their co-operation in putting together the programme motion and the Whips for arranging business through the usual channels. We recommend that the Committee sits on Tuesdays at 9.30 am and 2.30 pm, and on Thursdays at 9.30 am and 2 pm, beginning today and ending on 22 April. We shall, of course, break for the Easter recess, although we shall not do so until Thursday 1 April. The fact that we are sitting on that day makes fools of us in parliamentary terms, but at least we shall be diligent ones before the Easter recess. 
 On Tuesday 16 March and 20 April, our sittings will be extended until 8 pm if we need additional time to continue our debates. I welcome honourable colleagues, on both sides, to the Committee, several of whom spoke when we discussed the Bill on Second Reading. They will all have great interest in our proceedings in the coming weeks. I am sure that matters will be debated vigorously on all sides of the Committee. 
 The Bill is long and complex, but I am sure that members of the Committee have the stamina and expertise to give it thorough scrutiny. We have had discussions to the effect that the proposed order of consideration may be amended. It has been suggested that six sittings on the pensions regulator may be one or so too many and we have agreed through the usual channels to consider that at the end of the week, depending on how we proceed today and on Thursday. I certainly look forward to the challenge of considering the Bill with colleagues. 
 My Parliamentary Private Secretary says that it may or may not be the first time that the three principal spokesmen have names beginning with ''W''. He suggested that Waterson, Webb and Wicks sound like a firm of Croydon undertakers. I just hope that his jokes improve as we proceed. 
 We have two slight problems with the sittings motion. First, by the end of our discussions in Committee, the shape of the Bill might be different from what it is now—a point to which I shall return. Secondly, as the Minister rightly said, there is a feeling that the Programming Sub-Committee formally, or informally, should have another look at things by the end of the week. I endorse wholeheartedly the view that six full sittings on the regulator is over-egging the 
 pudding, but other parts of the Bill, as it stands, could benefit from a little more scrutiny. In our usual spirit of helpfulness and co-operation, the official Opposition are trying to ensure that every important part of the Bill has the chance of proper scrutiny. 
 I use the words ''as it stands'' carefully. We know that the Government will substantially amend the Bill in Committee, and I make no pretence that the Opposition will win any votes—unless we provoke the odd rebellion. By last Friday, 97 Government amendments had already been tabled, and I am happy to concede that they all seem minor. However, on Second Reading, the Secretary of State made it clear in the face of a lot of criticism from us and the industry that parts of the Bill had not been ready by Second Reading. 
 All Governments have their difficulties with parliamentary draftsmen, who tend to march to the beat of their own drum rather than that of their temporary political master, but there is a problem here. On Second Reading, the Secretary of State made it clear that the Government would be tabling amendments in several areas. He talked about tax simplification measures, which we think are important and useful; the vesting issue for short-term workers, which is also important; the ending of the requirement to offer additional voluntary contributions; and changes to section 67 of the Pensions Act 1995, for which we have long been pressing, to allow the rationalisation of accrued rights. Those are big issues because business organisations, such as the CBI and the Engineering Employers Federation, are already making noises about their concerns about proposals for automatic consultation of trade union representatives and others. They and we are, of course, in no position to comment until we see the amendments and new clauses. 
 Today, I want to extract from the Minister two eminently reasonable undertakings. One is that, to the extent that it is within his power and that of the usual channels, we see the amendments and new clauses sooner rather than later. That is not just for the Committee's convenience, although we do need at least two clear days to debate any amendments selected; it is sensible from the Government's and the Committee's point of view that we have the chance to ask all the outside bodies and organisations who take a close and proper interest in the Bill for their comments, concerns and support, if appropriate, in relation to the new rafts of amendments. I am sure that the Minister will be able to give that undertaking, subject to the caveat that I have inserted. 
 Secondly, I want the Minister's undertaking that there will be no other significant topics, other than those that I have reviewed in the Secretary of State's speech, which the Minister will flag up or the Government are likely to try to include in the Bill at Committee stage. Such an undertaking would help the Committee as well as you, Mr. Griffiths, and your co-Chairman. 
 We quite understand that the Government are not following strictly the printed order of the Bill. The large part of the Bill that will take the most time, as well as most of the attention and interest of outside 
 bodies, is the establishment of the pension protection fund. That takes up a substantial chunk of the Bill, and it is being taken out of order and considered later, presumably because several amendments, technical or otherwise, will need to be tabled to it. We make a specific plea in relation to that part, precisely because it is at the heart of the Bill, for as early an indication as possible of amendments and new clauses. 
 I wish to raise two final subsidiary points. During the Second Reading debate, there was an invitation to a possible meeting from the Secretary of State. It may have been summarily withdrawn at one point, but I am sure only in an uncharacteristic fit of pique. The Minister, not being prone to such behaviour, will want to reinstate an invitation along those lines. Regardless of whether it is formal or informal, we are happy to hold a discussion about the shape of the Bill and how we can help the Committee to be sensible and constructive so that we do not leave great chunks of the legislation—particularly the new bits of it—without scrutiny. Within the last 24 hours we have seen that the second Chamber takes its proper role as a revising Chamber very seriously; it is likely to take it even more seriously in the case of Bills that do not receive proper scrutiny due to Government delay in tabling amendments. 
 My other point is a traditional one that is made by every Opposition spokesman at the beginning of every stage of every Bill, but it applies in spades in the case of this Bill; it is to plead to be shown draft regulations. The Bill appears at first glance—and after subsequent glances—to be large and detailed. However, a lot of detail that is important to the industry and to the organisations that I have mentioned is not in the Bill; it is being left for regulations. I do not seek to make a legalistic point about that. We will sometimes try to make additions to the Bill, as Oppositions always do, rather than leave things to regulations. However, it would be immensely helpful if we could see the draft regulations. The Committee would find things almost impenetrable if we could not see them. That could be a rough draft, but it would assist greatly if we were shown a version of a draft, especially if it were produced in good time for the discussion of the part of the Bill that it addresses. 
 The Committee's proceedings would get off to a very constructive start if the Minister were forthcoming with regard to the undertakings that I am seeking.

Steve Webb: If we continue in the spirit in which we have begun, I hope that we can get through this matter in less than half an hour and get on with dealing with the Bill. On behalf of the Liberal Democrats and the hon. Member for East Carmarthen and Dinefwr (Adam Price) we welcome you, Mr. Griffiths, and your colleague, Mr. Cran, to the Chair. We look forward to serving under you.
 Our approach to the Bill will be constructive. The Liberal Democrats and the nationalist parties supported the principle of the Bill on Second Reading. That signals that we will be positive in Committee. We want to make pension protection 
 effective, in keeping with the discussions on Second Reading. 
 We share with the hon. Member for Eastbourne (Mr. Waterson) some concerns about the balance of this schedule for debate. The sections on the regulator will be less controversial than the pension protection fund and, as we discussed in the Programming Sub-Committee, the discussion of the scheme-specific funding proposals will be of profound importance to the schemes. Those who are responsible for managing perhaps £1 thousand billion of the nation's assets might feel that more than a couple of hours of discussion of how much they must have in their pension funds can probably be justified. 
 Labour Members have shown flexibility on some of the timing issues that we discussed last night, and I hope that we can also have a bit more flexibility on the scheduling issues as we work our way through things. We welcome the assurance that at the end of this week we will see how far we have got and possibly revisit those issues. 
 My hon. Friend the Member for Chesterfield (Paul Holmes) and the hon. Member for East Carmarthen and Dinefwr have taken a keen constituency interest in these issues. All Committee members speak for their constituents, but we are also here to try to create a system of pension protection that will end some of the scandals of the past.

Malcolm Wicks: We have got off to a useful start, except for a slip of the tongue on my part; I suggested that the hon. Member for Eastbourne represented the constituency of my hon. Friend the Member for Northampton, North instead of that seaside resort. I had a useful meeting with older people in my hon. Friend's Northampton constituency and what they had to tell me about pension strategy was still fresh in my mind. I apologise for that error.
 My right hon. Friend the Secretary of State for Work and Pensions suggested on Second Reading that we would introduce amendments to several areas of the Bill. The Committee has already seen some of them. Committee members will have noted that many of them are technical or drafting corrections, often intended to ensure internal consistency and coherence. However, we still plan to table some more significant amendments in due course, covering new topics such as the requirement for employers to undertake consultation when they make major changes to pension schemes. We will bring them forward as soon as we are able. We are keen to do what we can to facilitate adequate scrutiny of the Bill, and we will do our best on timing. 
 On the subject of flexibility, I should say that the Programming Sub-Committee had a useful meeting last night. We should continue in that spirit and ensure that those aspects of the Bill of concern to Committee members get proper scrutiny. I have already undertaken to consider whether we have the balance right between time for the regulator and time for the other aspects of the Bill.

Nigel Waterson: First, on the consultation proposals for trade unions and others, is there an intention to consult with bodies such as the CBI on that?
 Secondly, there has been a lot of lobbying—I think that we have all had a lot of that—in favour of extending the Bill to cover defined benefit schemes. However, that should also have a more detailed relevance to defined contribution schemes. Will the Minister table amendments on that subject? It was not flagged up by the Secretary of State. I am grateful for the general undertaking on timing.

Malcolm Wicks: On the consultation issues, we are in agreement in principle and we will table amendments. However, I have no doubt that without initiating a formal consultation procedure, we would want to discuss with all interested parties—employers, trade unions and others—how to ensure that that sort of consultation was meaningful. I give that undertaking.
 Much of the Bill is about final salary schemes or defined benefit schemes; the protection fund is the obvious example. However, other aspects of our proposals on regulation have equal meaning, or some meaning, for defined contribution schemes. We shall come to that, although there is no plan at present to define specific amendments on defined contribution schemes. 
 If the Secretary of State's undertaking to meet the hon. Members for Havant (Mr. Willetts) and for Northavon still stands, a letter or some form of communication on that will be with Committee members very shortly. 
 Question put and agreed to.

Win Griffiths: I remind the Committee that there is a money resolution and a ways and means resolution in connection with the Bill. Copies of those resolutions are available in the Room. I also remind Committee members that adequate notice of amendments should be given, and that, as a general rule, my co-Chairman and I do not intend to call starred amendments, including those reached during an afternoon sitting.Clause 1 The Pensions Regulator

Clause 1 - The Pensions Regulator

Question proposed, That the clause stand part of the Bill.

Malcolm Wicks: Before moving clause 1, I should like to say a few words—and I do mean relatively few, Mr. Griffiths—about the Bill as a whole.
 I have already mentioned that the Bill is long and that it deals with complex material. Committee members will know that the two central planks of the Bill are aimed at establishing the pensions regulator, which we are about to discuss, and at establishing the pension protection fund. All being well, we will come to that in a couple of weeks' time in part 2. There are, of course, other important changes in the rest of the Bill, and many of them will provide administrative easements for pension schemes and will help people plan their retirement, in terms of information. I have just given undertakings that we 
 will do our best to ensure that colleagues receive Government amendments as soon as possible. 
 Clause 1 establishes in law the pensions regulator. That body will be in place from April 2005, subject to the passage of the Bill and, therefore, Parliament's will. The current pensions regulator, the Occupational Pensions Regulatory Authority, has laid good foundations for the regulation of work-based pensions ever since it was established in 1997. We propose to build on OPRA's experience of more than seven years of regulation. However, we recognise that OPRA's effectiveness has been restricted by the current legislative framework, which often obliges it to take action in respect of many minor breaches of the law. 
 Our proposals for the new regulator will remove such restrictions and make the pensions regulator more flexible and responsive. Our proposals for the regulator also implement wide-reaching recommendations made about the regulation of work-based pensions in a number of key reports. The Pickering report, the quinquennial review of OPRA and the National Audit Office study of OPRA all recommended that any regulator should target its resources on the cases in which members' benefits are at greatest risk, and should avoid cheapening the regulatory currency, as one organisation put it, by wasting time on what might be regarded as petty breaches. That is exactly what we propose that the pensions regulator will do. 
 The Cabinet Office's Better Regulation Task Force has stated, from its experience of working with regulators across Government, that regulatory bodies are most effective if they can focus their resources on areas of real risk. The taskforce has also recommended that regulators should, wherever and whenever possible, adhere to the principles of better regulation as expressed by the taskforce, and should be proportionate, targeted, accountable, consistent and transparent in their approach to regulation. We intend the pensions regulator to embed those principles in its design, working processes and overall regulatory approach. 
 Clause 1 establishes the new regulator for work-based pensions. The pensions regulator will be funded indirectly through a levy on pension schemes, just as OPRA is. The regulator will collect that levy on behalf of the Secretary of State. We currently estimate that the regulator's running costs will be about £23 million a year. That compares with a projected £17 million for OPRA's final year, which we think will be 2004–05. 
 The increased running costs reflect the staffing and processes required to support the wider and more flexible powers of the new regulator, its additional responsibilities in respect of the pension protection fund, and its more proactive, outward-focused approach to regulation. We will need to review the precise coverage of the new levy and issues such as whether it will continue to include, as the OPRA levy now does, an element for funding the Office of the Pensions Advisory Service, often known as OPAS. 
 An effective and well respected regulator is central to our reforms. As far as possible, we must ensure that 
 pension schemes are well run and that their considerable funds are protected against poor administration and wrongdoing. That is the purpose underlying the creation of the new regulator and its governance structure.

Nigel Waterson: This is a useful moment to pull together some of the arguments that will re-appear when we deal with the amendments to part 1 of the Bill, and to look at the philosophy behind the regulator. I was grateful for what the Minister had to say about OPRA. [Interruption.]

Win Griffiths: Order. There is extraneous noise. However, it seems now to have disappeared.

Malcolm Wicks: Another kind of OPRA.

Nigel Waterson: I would grasp any excitement that there is during this Committee stage.
 The Minister rightly said that this is not a question of junking OPRA and saying that it has been a failure—quite the opposite. I hope that the Government—not only in the Minister's opening words, but in the regulatory impact assessment and in the fact sheet that appeared yesterday—have conceded that OPRA has made a contribution. However, it is time to move on. There was a growing impression that it was spreading itself far too thin and was ticking boxes across a range of issues, rather than focusing on the cases that mattered. 
 We are looking at a different philosophy. The Minister mentioned, as I have briefly, the review by Dr. Davis, the quinquennial review, the National Audit Office report and the comments made by Pickering about having a new kind of regulator. As Pickering says, the new kind of regulator is envisaged as having the authority to intervene in a proactive way. We welcome that and support the regulator, subject to a few points of detail—six sittings' worth, I suspect, from looking at the timetable. 
 I want to put one cultural point to the Minister. As Pickering says, it will be a new kind of regulator that will be different in its approach; it will be proactive and focused and it will have significantly more resources—I will return to that in a moment. One hears that a large proportion of the OPRA staff are expecting to be TUPE'd over to the new body, and I see the Minister nodding at that. I am sure that some element of continuity is important, but is he satisfied that if that happens, the new culture that the Bill is rightly trying to engender will be apparent? I am not necessarily suggesting a re-education programme for the staff, but it is difficult to get people out of their old ways and habits sometimes. I would like some reassurance from him on that, particularly as to how that would apply to the people at the top of the existing structure, although I do not want to get into discussing personalities. 
 Then there is the question of cost. A variety of concerns have been flagged up by organisations. The Association of Consulting Actuaries, which plays a major role in Committee, has expressed concerns 
 about whether the proposals would lead to what it calls an ''invasive regulator.'' It said: 
''If the additional requirements placed on the New Regulator manifest themselves in widespread additional paperwork . . . this will lead to an acceleration in scheme closures''.
 That is one of the themes—one of the leitmotifs—that will run through this Committee stage. Will having a highly invasive regulator in a complex new structure, together with the requirements of the PPF, which we shall discuss later, have the opposite effect to the Government's laudable aim of not only protecting, but encouraging that type of pension scheme? That is a concern that has been flagged up. 
 The British Chambers of Commerce says something similar: 
''The Bill imposes more onerous duties on trustees, managers and other persons involved with pension schemes to provide information to the Regulator.''
 I do not think that anyone would disagree with that being the case and with that being useful. However, it points out: 
''This will translate into higher costs for employers that operate schemes''.
 That is a genuine concern, which needs to be addressed. Similar concerns have been touched on by organisations such as the National Association of Pension Funds. 
 It is instructive to examine the regulatory impact assessment. With all due respect to whoever drafted the explanatory notes, the RIA is often more interesting and more helpful on large Bills. As the Minister did, it begins by registering the fact that: 
''Opra has made a good job of fulfilling the role it was required to perform, and encouraged better governance of pension schemes.''
 I place on the record that that is something that Conservative Committee members agree with. However, it says: 
''When addressing breaches of pensions legislation, the regulator should not just punish''.
 It then goes on to talk about compliance, and we shall return to that in more detail. 
 As the Minister has said, it is estimated that the regulator will have annual running costs of approximately £23 million, including the costs of any monitoring or enforcement action. That represents an increase of £6 million—25 per cent.—on OPRA. There will be a one-off start-up cost of approximately £6 million and a further £20 million for IT development. 
 My initial concern is that the estimate is conservative. The position of the regulator is a new one, with a new range of powers, some of which are far-reaching. It will need to extend TUPE across a lot of the existing OPRA areas, and I suspect that it will have to take on some specialised new matters, particularly given the tight time scale for implementing and setting up the bodies that we are discussing. 
 Will the Minister reflect on whether that estimate needs to be revisited? We do not want to end up with a son of Ofcom—a large, lavish, expensive, invasive regulator. These are early days. We not want to have a 
 regulator that is out of control, both financially and in other areas. That is why the Opposition will try to persuade Committee members that here and there there should be limitations on the activities and powers of the regulator. That is all in the detail. We accept the principle, and think it is a good idea. We support the new regulator, and clause 1.

Steve Webb: We too support the principle of the establishment of a new kind of regulator. Establishing a regulator who is proactive and who looks for major breaches that could lead to large numbers of people losing large amounts of money—rather than one that is bound by statute to chase up nit-picking breaches of the regulations—has to be the right way forward. In principle, we are in favour of establishing a new kind of regulator, so we support clause 1. However, there are a couple of broad issues that we wish to raise, and it will be sensible to put them on the table now and come back to them in more detail later.
 First, how will the new regulator relate to other bodies? The briefing note that the Minister circulated to Committee members is helpful. It says that the Financial Services Authority and the pensions regulator are intended to be complementary, and attempts will be made to ensure that there is no overlap, and no gaps. That is a challenge. There is a risk that some elements of the pensions world will be regulated by both bodies, and some—if we are not careful—by neither. Each of those outcomes would be unsatisfactory. 
 There are, for example, grey areas concerning group personal pensions. There is clearly an employer aspect to those, but an individual personal pension would be regulated by the FSA. Are there other such areas, in which companies, employers and providers could find themselves regulated twice if we are not careful? I hope that the Minister will reassure us that that matter has been thought through systematically, and that there is no overlap between the functions of the two regulators.

Nigel Waterson: Does the hon. Gentleman share my concern that on the fact sheet, which I suspect is helpful, and is certainly designed to be fairly simple to follow—I can follow it, so it must be—a simplistic distinction is drawn on page six? It states that the pensions regulator should not be concerned with sales and marketing, but with the ongoing regulation of pension arrangements. Does the Minister agree that in practice it may be difficult to draw that line?

Steve Webb: I think that the hon. Gentleman is correct. There will be grey areas. He expressed a concern that regulation should be proportionate. Double regulation is unlikely ever to be proportionate. I hope that the Minister can reassure us on that point.
 If a constituent comes to me with a company pension problem, I am sometimes confused about where to go, and where to send them. There seem to be a plethora of different organisations, each with a slightly different role. My worry is that the new regulator will not sweep them away, but could instead add to the complexity. There will be a pensions regulator, and a pensions regulator tribunal where 
 people who do not like what the pensions regulator said can go; the pensions regulator will have a determination panel; and OPAS will continue. There will also be a pensions compensation board, a pensions ombudsman and a pension protection fund—and those all relate to company pensions. 
 We might be missing an opportunity. I appreciate that each of those organisations has a different role, but what scope is there for bringing not all of them, but some of them, under one roof? I would be grateful for the Minister's reflections on that. The public—employees and members of pension schemes—are not well served if they do not know where to go or who is responsible. If something goes wrong, do they go to the regulator, the ombudsman or the advisory service? That needs to be made clear for the public. I am worried that even in these early clauses we are creating lots of different institutions that may confuse people. 
 The only other observation that I should like to make at this stage relates to the overlap between the regulator created under the clause and the pension protection fund, which we will deal with later. It is important that those two bodies dovetail effectively and that there is not an overlap between them. I am already slightly confused—it did not take long for me to get confused—about whether if a fund is not looking healthy, the pension protection fund will say to the regulator, ''That's your job. You keep an eye on it. You issue an order to them. You make sure they're keeping up to the funding requirements.'' Will the pension protection fund sit and watch, or will it be monitoring funds, looking at and seeking information, and ensuring that schemes are funded to such a level that the PPF will not be drawn on? Will that duplicate the regulator's activities? I appreciate that the Bill says that the information that the regulator gathers can be for the purposes of the PPF—so information can be passed on—but will the PPF be asking for the same information as the regulator, or related information? 
 How do all the different bodies fit together? We have plenty of scope to explore that idea, but we want a proactive regulator that sees the big picture, not one that duplicates or triplicates what other bodies and regulators are doing. We want members of schemes to know who to go to, and how these bodies relate to each other. Perhaps we have missed an opportunity to streamline the system when we create yet more bodies, which is always a danger when tackling a problem. I should be interested to hear the Minister's reflections.

Malcolm Wicks: This has been a useful preliminary discussion of some important issues. The hon. Member for Eastbourne rightly notes that staff who are working for the existing body, OPRA, have rights to transfer to the new body—the regulator. As he said, those two bodies will be covered by TUPE. I take on board his important question. As we are using an existing body as the foundation for a new body, how are we to ensure that it is genuinely a new body—not one that throws away all the good practices of the past, but one that has, to use the hon. Gentleman's term, a new culture? I am exercised by that question. In another life, when I was Under-Secretary of State for Lifelong Learning and we created the learning and skills councils, there were those who were concerned
 that that would be a re-badging of the then TECs, and others who thought that it might be a re-badging of the Further Education Funding Council. I shall not say any more about that—but these are important issues in public policy.
 I am satisfied that we can get the right balance on continuity. I thank the hon. Gentleman for his positive remarks about the work of OPRA, which are justified given the framework in which it has been operating. On visiting OPRA recently, I was impressed in different ways. Colleagues there are some of our major champions of the need for change and some of the keenest and most expert supporters of the concept of the new regulator. There has been much change in that organisation in the past year or so. I also understand that in terms of the leadership of the regulator, at both professional and board level, we need to make some judgments about the right mix of continuity and change. We intend to make those judgments. When there is news about important appointments, we shall try to bring that to the Committee. 
 I am satisfied that we can get the change we want. As the hon. Member for Eastbourne implied, there is no need to take the OPRA troops out into the fields and re-educate them in a Maoist fashion—or rather, given their location in Brighton, to take them on to the Sussex downs or the beaches. We do not need to fight this battle on the beaches; there are others way to do it. 
 The hon. Member for Eastbourne raised the important issue of how we make sure that new, and in many respects recalcitrant and tougher, regulations do not become too invasive for the generality of organisations. There is no one single answer to that. Throughout our deliberations on pensions and in the Bill, we have tried to get the right balance between imposing new duties and introducing easements to lighten the load. We have been in discussion with the industry about the kind of information that will need to be given to the regulator. We fully take on board the hon. Gentleman's point about the need to get that balance right. 
 On costs, the hon. Member for Eastbourne found himself in the interesting position of not accusing—that would be too pejorative a word—but suggesting that we may be being too conservative—not a charge that we normally face. We have costed the proposals thoroughly from the bottom up. Given the new powers, we have asked what is needed, and we are convinced that the costings are right. 
 For the most part, schemes will be required to provide to the regulator information that is already readily available. People from a sample of schemes have been asked to provide the information that is likely to be part of the scheme return, and they have been broadly supportive of that, and what it requires. They have expressed no significant concerns about possible costs to them. We are keeping that under review, not only in the early days. 
 I thank the hon. Member for Northavon for his broad support—although I expect that his remarks 
 will quickly disintegrate into devastating technical criticism and proper scrutiny, which we will do our best to cope with. During our deliberations, we will be able to tease out the respective roles of the new regulator and the FSA. I can see why many in the outside world might ask proper questions about them, but we are convinced that there is a distinction to be made between the work of the FSA and that of the regulator. We obviously want to ensure that those distinctions are clear, but that the two organisations work closely together where necessary. 
 The hon. Member for Northavon made a useful point by noting how many different organisations there are in the pensions world. At first sight, questions may well be asked about whether we really need all those organisations. We are not in the business of inflating the number of organisations for the sake of it. However, we will be able to demonstrate to the Committee why the tribunal has to be at some distance from the body that it adjudicates, and I know that the hon. Gentleman will take that factor on board straight away. 
 During our discussions, we will also be able to demonstrate why the regulator and the pension protection fund have different functions, but nevertheless need to work very closely together. They need to work closely together because the more effective the regulator is in regulating company pension schemes, especially those at risk, the less demand there will be on the resources of the pension protection fund. Furthermore, for the pension protection fund to do its job properly, it needs first-class information and intelligence about the state of health of company pension schemes. In large part, that information will come from the regulator. This is an important question, and there will be different detailed opportunities to return to it.

Steve Webb: Will the Minister try to clarify the relationship between the roles of the pensions ombudsman and the regulator? Will there be circumstances in which people could go to either of them, or both?

Malcolm Wicks: There will be separate discussions about the ombudsman. However, the role of the regulator is to keep a close watchful eye on the range of schemes, particularly on the basis of information and intelligence, so that it can scrutinise using the new powers, and some existing powers that it will take over from OPRA, which we will discuss later today, or perhaps on Thursday. There is also OPAS, the Office of the Pensions Advisory Service, which members of pension schemes with concerns can ask to consider the issues and reach agreements with company pension schemes wherever possible. Failing that, there is the right to go to the ombudsman in more serious cases. As we will see later, in addition to the existing functions of the pensions ombudsman, the PPF needs an ombudsman's function and we shall make proposals about that. The hon. Member for Northavon can add that to his list of complexities to make important debating points about, but we shall seek to justify why that new office is important.
 Question put and agreed to. 
 Clause 1 ordered to stand part of the Bill.

Clause 2 - Membership of the Regulator

Nigel Waterson: I beg to move amendment No. 104, in
clause 2, page 1, line 11, leave out from 'the' to end of line 12 and insert 
 'chairman and approved by the Secretary of State.'.

Win Griffiths: With this it will be convenient to discuss the following amendments:
 No. 105, in 
clause 2, page 1, line 15, leave out subsection (3).
 No. 106, in 
clause 2, page 2, line 9, at end add— 
 '(7) At least one of the non-executive members of the Regulator shall be a representative of an occupational pension scheme subject to the pension protection levies under this Act.'.
 No. 107, in 
schedule 1, page 164, line 24, leave out paragraph 3.
 No. 108, in 
schedule 1, page 164, line 32, leave out 'Secretary of State' and insert 'Regulator'.
 No. 109, in 
schedule 1, page 165, line 1, leave out 'Secretary of State' and insert 'Regulator'.
 No. 110, in 
schedule 1, page 165, line 4, leave out paragraph 6.
 No. 111, in 
schedule 1, page 165, line 18, leave out paragraph (c).
 No. 113, in 
schedule 1, page 166, line 2, leave out 
 'with the approval of the Secretary of State'.
 No. 112, in 
schedule 1, page 166, line 5, leave out paragraph 10.
 No. 114, in 
schedule 1, page 167, line 6, leave out 'Secretary of State' and insert 'Regulator'.
 No. 115, in 
schedule 1, page 167, line 10, leave out 'Secretary of State' and insert 'Regulator'.
 No. 116, in 
schedule 1, page 167, line 12, leave out 'Secretary of State' and insert 'Regulator'.
 No. 117, in 
schedule 1, page 167, line 18, leave out 'Secretary of State' and insert 'Regulator'.
 No. 118, in 
schedule 1, page 167, line 21, leave out 'Secretary of State' and insert 'Regulator'.
 No. 120, in 
schedule 1, page 171, line 30, leave out 
 'with the approval of the Treasury'.

Nigel Waterson: This is a slightly disparate group of amendments. Amendment No. 104 would take away
 from the Secretary of State the power under 2(1)(c) to appoint the five other members of the board of the regulator and give it to the chairman with the final approval of the Secretary of State. This is a small but important shift in the balance. A similar point is made in amendments Nos. 108 and 109 and Nos. 113 to 118, and a slightly different point is made in amendment No. 120, to which I shall return.
 We argue that the Government cannot have it both ways. We support the setting up of the regulator, as I have already made clear. We can all agree that the regulator and the role of the PPF should be entirely independent. The regulator should be free to roam widely, with its powers and its duties to do its best for the resources that it is given, without fear of political interference at any level. The Government are presumably making a virtue of the fact that the PPF—and, I suspect, the regulator—will be watchdogs with teeth, which they will be willing to use, and will be free from any Government influence. That is as it should be. It has been made abundantly clear by Ministers that the Government are not standing behind the new fund—the PPF—we shall talk about that in much more detail, and at some length, in due course. Those organisations, including the regulator, are free-standing. 
 In the Government of which the Minister is a member, there is a trend for people to be control freaks, and not be able to let go—although I except the Minister from that accusation. Not only does the Secretary of State have his fingerprints all over the Bill, so does the Treasury. I have made the point before, but it is no less valid for that: the Department for Work and Pensions is a wholly owned subsidiary of the Treasury. The Chancellor likes to indulge in micro-management of almost everything in our daily lives; this matter, I fear, is no exception. 
 No doubt there will be an exhaustive and high-level procedure to recruit the best possible chairman for the new regulator—someone with exceptional qualities. The same goes for the chief executive. The chairman is to be appointed by the Secretary of State. We are content with that; like the creation of the world, the process has to start somewhere; the regulator cannot just appear out of the clouds.

Steve Webb: It is not quite the same thing.

Nigel Waterson: I am not suggesting that, nor that we turn the Bill into some sort of religious movement. However, I think that the chairman and chief executive should work together, with the sort of people with whom they will be comfortable working, who will add value to their role. That is not to say that we would completely take away the role of the Secretary of State. As amendment No. 104 says, the appointment of the chairman should be
''approved by the Secretary of State.''
 If someone wholly inappropriate were appointed to any of these jobs, the Secretary of State should certainly have a role. However, at the end of the day, my view is that the regulator should be master in its own house. 
 There is a separate point in amendment No. 120, which would withdraw the words 
''with the approval of the Treasury''
 from the Bill. That magic little phrase comes up quite often, and the Committee should wish to discourage it. We are certainly trying to discourage political interference from the Department responsible for the legislation; why should we encourage interference from the Treasury? In different parts of the Bill, we will try to strike out the words ''with the approval of the Treasury'', and I hope that it will be useful if at this stage, I explain precisely why. 
 Amendment No. 105 would take out subsection (3), which was a puzzle to us. It states: 
''At least two of the members appointed under subsection (1)(c) must be appointed from the staff of the Regulator.''
 I do not know whether that is a good thing or not, but I have tabled a typically probing amendment—although with a majority such as the Government's, every amendment is really a probing amendment—to find out the thinking behind it. Why should it necessarily be a good thing to have members of the regulator's staff among the other people? Subsidiary to that, does the provision have to be spelled out so rigidly? An alternative would be to table an amendment stating that the staff of the regulator would not be disqualified; if someone were clearly the right person, they could be appointed. I only throw the idea out; I have no intention of pressing this amendment, or any of this group, to a Division. However, I would be interested to hear the reasoning behind subsection (3). 
 Amendment No. 106 concerns a different issue. It would add a new subsection at the end of clause 2: 
''(7) At least one of the non-executive members of the Regulator shall be a representative of an occupational pension scheme subject to the pension protection levies under the Act.''
 The National Association of Pension Funds raised the point that amendment No. 106 addresses. It is rightly concerned that in its operations the regulator—and other bodies, including, or perhaps especially, the PPF—should have in mind the needs and problems of the industry, such as excessive regulation and the invasive regulatory concern that I mentioned earlier, and the cost, which it will ultimately bear, of the various layers of supervision and regulation. 
 Therefore, I propose that at least one of the non-executive members of the regulator should be a representative of an occupational pension scheme covered by the Bill. Who else has a more immediate and day-to-day appreciation of the role of the regulator vis-à-vis the industry? I would be a surprised if there were a serious objection to that. It would be interesting to learn what argument the Minister could have against that.

Adam Price: When the hon. Gentleman talks about a representative, does he mean a representative of the members of the scheme, the sponsoring employer or the trustees of the scheme? The TUC has called for a members' representative to be included in the new regulator.

Nigel Waterson: Yes, I noticed that in the TUC briefing. I am entirely agnostic about this. The representative could be a member of any of those three groups; he or she need only be someone involved with a scheme whose day-to-day operation would be intimately affected by the Bill. I suspect that that would usually be a trustee or a representative of the sponsoring employer, but I have not spelt that out in the amendment and I do not see why it is necessary to do so.
 Amendment No. 107 is intended to clarify matters. It proposes to leave out paragraph 3 of schedule 1, which states: 
''No person is to be prevented from being a member of the Regulator (whether as chairman or otherwise) merely because he has previously been such a member.''
 We could not work out what that was getting at. Is there a regulation somewhere else—perhaps in another piece of legislation—that I have failed to pick up that would bar people from standing again after serving for a certain period? What sort of situation is that paragraph meant to cover? This is a probing amendment; we are not wedded to it—but I would be interested to hear the Minister's comments on the subject. 
 Amendment No. 110 raises a similar point. Paragraph 6 refers to matters such as non-executive members ceasing to be members otherwise than on the expiry of their term of office. What kind of situation is envisaged there? Is it illness? I suppose it is not death, unless the compensation is to be payable to people's families. If the Minister were to talk us through what kind of situation he has in mind I am sure that we would be content. 
 Amendment No. 111 would delete the reference to ''additional staff'' being 
''made available by the Secretary of State under paragraph 10.''
 We are not necessarily set against that, but to question it is part of the business of insulating the new regulatory set-up from Government—from any Government. Governments have a habit of interfering, and none more so than this one. What is envisaged here? Is it seconding people with particular skills on a short-term basis, or on a long-term basis? We would like to know whether wholesale shifts of officials from the Department to the regulator are envisaged. 
 I have dealt with amendment No. 113, which makes the point about approval. Amendment No. 112 makes the same point—it is about additional staff. I have dealt with amendment No. 114 as well as amendment No. 115 and so on. Unless someone is prepared to challenge me, I think that I have dealt with all the amendments. I hope that it is clear what we are trying to achieve, which, in some cases, is merely to draw out information from the Minister.

John Robertson: On a point of order, Mr. Griffiths. In view of the coverage that the clause has already had, will you be allowing a clause stand part debate, or will that be part of the discussion on the amendments?

Win Griffiths: That will depend upon how the debate on the amendments ensues. If there is a wide-ranging debate, we will not need a clause stand part debate, but if the debate is relatively brief, we can have one.

Nigel Waterson: Further to that point of order, Mr. Griffiths. It was a helpful point to raise this early in our proceedings. I know that it is not my decision—far from it—but it might be helpful for you and your co-Chairman if I say that our broad approach throughout our discussions will be that when we have detailed debates on a series of amendments, Conservative Members will not seek a stand part debate unless there is a particular reason for doing so—and in that case, I would flag the fact up at the start of my remarks on the amendments, leaving the decision, as always, up to the Chair.

Steve Webb: I am intrigued that the amendments seek to set the regulator more at arm's length from the Secretary of State. I cannot help reflecting that yesterday in the House, a Minister was trying to put the regulator as much at arm's length as possible, so as to evade any responsibility. If I may say so without any disrespect, I would have thought that we wanted the Secretary of State's mucky paws all over the regulator so that he or she is accountable for its failings—or, we hope, its successes—and for the Bill's failure or success in achieving its aims.
 I am not sure that we want to reduce the Secretary of State's power of appointment to the regulator, and thereby distance it and make it so independent that, as with many of those bodies, it is hard to lay a finger on it because it is nothing to do with the Government. While I understand the points that the hon. Gentleman has made, I do not feel sympathetic to such amendments. 
 However, I do have some sympathy with amendment No. 106, which is about representatives of the scheme being part of the regulator. The hon. Member for East Carmarthen and Dinefwr raised the important question of what we mean by a representative. Clearly, people subject to the PPF levy have an interest, but presumably they might legitimately be on the board of the PPF rather than on the regulator. Immediately we start to see the overlap between those two bodies. I do not mean that the representative needs to be an employer just because employers are levied—that is the reference in amendment no. 106—but rather that there should be some sort of representative of a scheme, to give that perspective. I suspect that that representative might need to be an employer, because of the nature of what the regulator does. However, it would be helpful to get the Minister's response to the idea of a worker representative as well. 
 One of the problems with regulation in the past has been that the regulator has known what was going on, but the members of the scheme have not. If the members had known what the regulator knew, they might have stopped contributing to a scheme. Therefore, the amendment raises a strong question about how the new system will ensure that members of schemes have access to the information that the regulator has collected. I do not think that that will 
 be achieved by having a token worker on the board. There may be a case for that, but it will not achieve the objective that I have just described. I hope that the Minister will tell us what would achieve it. 
 It seems sensible to raise one other query, as we are discussing amendments to clause 2. Subsection (1) says: 
''The regulator is to consist of the following members''.
 It does not say ''the board of the regulator'' is to consist of the following members, and I do not quite understand the choice of that language. The PPF has a board, and later, the Bill refers to membership of the board of the PPF, but not about membership of the board of the regulator. As I understand it, subsection (1) says that the regulator ''is'' those seven people. I do not follow that. It may be related to the idea of its being a body corporate, as is stated in clause 1. 
 Can the Minister explain the language of the clause? I have some sympathy with the need for representation, but I am less convinced about the need to distance it from the Secretary of State. We want him to be responsible for the success of the regulator.

Adam Price: I add my support to the principle of having a members' representative on the board—or on the regulator—in line with amendment No. 106, although there is an argument to be had about what precisely we mean by representation.
 The lay members—the non-executive members—have an important and distinct function under the terms of the Bill. It would be useful if the Minister could give us a flavour of the recommendation and the guidance that would be given on the profile of those members, regardless of whether, according to the Opposition amendment, they are appointed by the regulator having given due regard to the recommendation of the Secretary of State, or the other way round. It would be useful to have a greater sense of the nature of that representation. 
 I support the TUC's call for member representation. It is important in relation to the principles that underlie the Bill—transparency, greater accountability and greater security. Having a voice for the membership of schemes is essential in achieving those aims. The current proposals retreat from the present position, whereby OPRA has a members' representative. There is a requirement for that—I stand to be corrected if that is not the case. If we look across Europe, we see that most regulators have representation for social partners. Can the Minister tell us how we can guarantee that the interests of members are represented by the five non-executive members of the board of the regulator?

John Robertson: I, too, welcome you to the Chair, Mr. Griffiths. I hope that we will have a pleasant time in the coming weeks.
 I do not often support Liberal Democrat or Plaid Cymru members, but I have sympathy with what the hon. Gentlemen are saying. I have been approached by Amicus, which asked how the board would be made up. How does the Minister envisage that that will be done? It is important that employees be represented, 
 particularly in the light of the problems that we have seen recently involving pension schemes that were wound up with little or no compensation for those affected. 
 When considering the amendments tabled by the Conservatives, I find it laughable, after what happened to Equitable Life, that we are talking about standing back and not allowing the Secretary of State to have an influence. It was all too obvious yesterday that the Opposition were trying to pin the blame on Labour Ministers, because those people were not there at the time. The Government take collective responsibility. That was shown by the contributions that were made.

Nigel Waterson: Does the hon. Gentleman see a parallel between the desire to compensate those who lost out in the Equitable Life saga—a claim rejected by the Government yesterday—and the desire for compensation for the estimated 60,000 people who have lost their pension rights and will not be compensated retrospectively under the Bill?

John Robertson: The short answer is no. That was explained well by the Financial Secretary to the Treasury in the House yesterday, and I refer the hon. Gentleman to Hansard if he does not recall what was said.
 There must also be some kind of scrutiny of the regulator and its body. The best person to do that is the Secretary of State. 
 Amendment No. 120 refers to the Treasury. The idea that the Treasury would not be involved when money is involved is laughable. The provision is about the accounts. If my right hon. Friend the Chancellor did not want to look at them, there would be something wrong. The amendments are mistaken, so I urge my hon. Friends not to support them if they are pressed to a Division. None the less, I ask the Minister to examine the make-up of the board. Perhaps he could tell us what the chances are of employees being represented on it.

Malcolm Wicks: We have had a useful mini-debate on the important issues relating to the amendments. I will not respond to the slightly gratuitous remark that my Department is a wholly owned subsidiary of Her Majesty's Treasury. I have been checking my pager to see how to respond to that devastating criticism, but for some reason the Treasury has not yet been in contact, so I will struggle on with the excellent notes provided by my colleagues in the Department for Work and Pensions, with my own gloss on them. I take on board the spirit in which the hon. Member for Eastbourne moved the amendments. I think that he was saying that they are essentially probing amendments, and they certainly raise some interesting questions, which I hope to address.
 Amendment No. 104 would move the primary responsibility for the appointment of members of the regulator from the Secretary of State to the chairman of the regulator. It would not allow members to be staff of the regulator. That raises significant accountability issues. I noted that the hon. Member for Northavon was rather keen to ensure that my 
 Secretary of State's DNA was on the regulator. When it is a success—which it will be—I hope that my own DNA, too, will be found on the site. 
 With appointments to the board, we are, at a technical level, simply replicating the way in which members were appointed to the board of the Occupational Pensions Regulatory Authority by the then Secretary of State under the Pensions Act 1995. I am advised that our drafting merely follows the precedent used to establish appointment to the board of OPRA. Although we think that there are good reasons for following that precedent, the Conservative spokesman might once again accuse us of leaning towards the conservative side.

Kevin Brennan: Is there not additional reassurance that my hon. Friend the Minister can give the Opposition Front Bench, in that since 1995, public appointments have come under much greater scrutiny to ensure that they are made on merit, rather than for political reasons? Those appointments will be subject to scrutiny by the Commissioner for Public Appointments, as they were not in the past.

Malcolm Wicks: I take that point.
 Let me make some more progress. Clause 2 as it stands ensures that the Secretary of State is responsible for ensuring that the chairman is fully consulted and involved in selecting the members of the regulator. It also ensures that the members of the regulator fully reflect the skills, knowledge and experience needed to run the organisation. I think that we have got the balance right: appointments are made by the Secretary of State, but obviously the chairman of the organisation is fully consulted. 
 I should say to the hon. Member for Northavon that when we refer to the regulator, we are often talking about the corporate body, rather than an individual. The way in which we describe the regulator equates to how we describe the pension protection fund. However, I understand his puzzlement about such terminology. 
 Amendment No. 104 would ensure that the responsibilities that I mentioned fell primarily to the chairman. I believe it more appropriate for such key responsibilities to be carried out by the Secretary of State—albeit consulting the chairman in due course, once the body has established itself—as he is answerable to Parliament. We need to establish that accountability. 
 Amendment No. 105 would remove from the clause the provision that at least two members of the regulator, as well as the chief executive, should be members of staff of the regulator. I can understand that point, and it is perfectly proper to debate whether staff should be on the board. 
 We were influenced in our approach by the recommendations of Derek Higgs's report on corporate governance, submitted to the Chancellor of the Exchequer and the Secretary of State for Trade and Industry in January 2003. Annex A, item 3 on board balance and independence states: 
''The board should include a balance of executive and non-executive directors (including independent non-executives) such that no individual or small group of individuals can dominate the board's decision taking.''
 Although Higgs obviously had in mind private companies, we considered it appropriate to follow that advice. 
 Amendment No. 106 would provide for the regulator to have a member who is a representative of an occupational pension scheme subject to the pension protection levies. Some members of the Committee have raised that issue. I understand where they are coming from, but we believe that the amendment would put an undesirable limitation on flexibility, which, as I have said, is designed to ensure that appointments to the regulator are based purely on the skills and knowledge required and the relative merits of each candidate. One of our difficulties, which relates also to the pension protection fund, is that we would be wary of different representative interests, albeit some important ones have been highlighted, and feel that their interests would be taken into account only if they have a member on the board. 
 We want the flexibility to choose the right people. I assure the Committee that, in terms of a range of skills, knowledge and experience, not all members of the board will be the same customers with the same interests. Although the regulator will have a role in respect of the pension protection fund, its primary objective is to protect members' benefits. As I am sure the Committee will agree, that is best served by an ongoing properly funded scheme and a solvent employer. It is worth noting, of course, that the regulator has responsibility for many types of scheme. Although a good point can be made about one interest being represented on the board, we are talking about defined contribution occupational pension schemes, personal pensions and stakeholder schemes, as well as defined benefit schemes, which will be subject to the pension protection levies.

Steve Webb: The Minister mentioned stakeholder schemes. Will he explain whether the regulator's role in respect of such schemes does or does not overlap with the FSA's role on stakeholder schemes? Is that not an individual purchase?

Malcolm Wicks: A major issue would be that of contributions to stakeholder pensions. The regulator must ensure that the contributions of the employer and the employee, when collected by an employer, are paid into a scheme. That is one way in which the stakeholder would be relevant. If the hon. Gentleman wants more detail in writing, I shall consider his question to see whether I have fully answered it.
 It is true that the board of OPRA consists of specified representatives of different groups within the pension community. However, we take the view that such a mechanistic approach is out of step with what is required for a modern and proactive regulatory body. I am confident that sufficient consultation procedures are built into the pension protection fund to make the amendment unnecessary. 
 Amendment No. 107 would remove the express provision in the Bill that allows a person to serve more 
 than one term as a member of the regulator. That would be undesirable as it would limit the pool of people who could be called on to serve as ordinary members of the regulator. It would also prevent someone who had previously served as a member from being promoted to chairman. Amendment No. 110 would remove the Secretary of State's discretionary power to authorise compensation to members whose term of office is cut short for any reason. The provision replicates existing powers in the 95 Act. In a changing environment, where the need for knowledge and skills may shift over time, it may be appropriate to appoint a new member and remove an existing one at short notice. It would be inappropriate to rule out even the possibility of compensating a member whose expectation of serving a full term is not met. 
 Amendments Nos. 111 and 112 would remove the possibility for the Secretary of State to make staff available to the regulator in the way that he currently does for OPRA. The 1995 Act enables the Secretary of State to make additional staff available to OPRA. That power to enable secondments of staff from my Department has proven useful for both OPRA and the Department. OPRA has benefited from the availability of experienced pensions officials, and the Department has gained invaluable experience of the realities at the front line of pensions regulation. I know from dealing with colleagues in OPRA who are working on these measures just how useful such cross-fertilisation can be. 
 The effect of amendments Nos. 108 and 109 would be to remove from the Secretary of State the power to authorise the regulator to make payments for pensions, allowances or gratuities to, or in respect of, non-executive members of the regulator. The power would be transferred instead to the regulator. 
 Amendment No. 113 would remove a provision for the Secretary of State to approve the terms, conditions and remuneration of regulator staff. The effect of that would be to remove Government control over those matters, including those relating to the members of the regulator. 
 Amendments Nos. 114 to 118 would remove the Secretary of State's right to determine the scale and nature of pay, allowances, pensions and compensation payments to members of the determinations panel of the regulator. They would leave those matters to the discretion of the regulator. 
 We wish to put in place sensible and appropriate working arrangements that help to ensure that the chairman and chief executive can operate effectively and at arm's length from the Government, while being supported by the Department. That is why pay, terms, conditions and so on are for the regulator to determine and the Secretary of State to approve. That is in line with Cabinet Office guidance to Departments on setting up non-departmental public bodies, which recommends that key decisions such as the remuneration, allowances and pensions of chairs and senior members are matters for Departments, not the body itself. Furthermore, I do not believe that those who will be funding the regulator through the general levy would want to see the regulator itself controlling 
 the level of salaries and wider terms and conditions without reference to external scrutiny. 
 Amendment No. 120 is designed to remove the statement that the regulator's accounts must comply with any directions given by the Secretary of State with the approval of the Treasury. That covers issues such as accounting methods and the detail of the information to be provided in the accounts when they are presented to Parliament. The provision in clause 2 is common to the accounts of non-departmental public bodies. It allows the Treasury, which leads both on accounting matters in general, and on the presentation of accounts of public or quasi-public bodies to Parliament in particular, to provide input to the Secretary of State of the relevant sponsoring Department, in this case the DWP. That provision replicates the provision for OPRA in paragraph 16(2) of schedule 1 to the Pensions Act 1995. 
 I hear the suspicion of the hon. Member for Eastbourne, but I hope that I have assured him that what we are proposing is routine practice, which has been practised by previous Administrations. I ask the hon. Gentleman to withdraw his amendment.

Nigel Waterson: I am grateful to the Minister for that comprehensive explanation of most of the points that I raised. I remain deeply suspicious of the Treasury, but he has reassured me that this particular provision relating to Treasury approval is common and routine.
 I accept the Minister's arguments about the role of the Secretary of State and keeping the regulator at arm's length. It is just that we do not agree philosophically on the meaning of keeping the regulator at arm's length. However, for the moment I shall not press those amendments. 
 I see the point about flexibility regarding the membership of the board, but I think that the industry would be surprised if—other things being equal—there would not normally be at least one representative of an active pension scheme on the board giving their day-to-day experience from that perspective. I can put it no higher. 
 I thought that I was careful in moving the amendment to say that it was not necessarily a bad thing for people to be reappointed. I was trying to puzzle out, through the Minister, what provision said that they could not be appointed again and what provision we were trying to tackle. I am neutral on whether reappointment is a good thing. It depends entirely on the individual. 
 I was slightly puzzled about compensation and the removal of existing members at short notice when their skills are no longer required. I should like to draw an assurance from the Minister—a nod of the head would do—that we are not talking about people being removed for incompetence, inability or non-attendance; that we are talking about those who had a legitimate expectation of continuing for a period; that people would be appointed in the first instance for a set period that would possibly be renewable and then, for reasons that were outwith their own 
 inadequacy or incompetence, would be compensated. There is nodding of heads, so I shall quit while I am ahead. 
 On the secondment of staff, I was just trying to ascertain that there would not be great shoals of double agents, as it were, coming in from the DWP or the Treasury, trying to subvert the independence and rigour of the new regulator. The Minister assures us that that practice has produced value on both sides when used in respect of OPRA and I am happy to accept that. On the basis of those explanations I am happy not to press these amendments to a Division. I beg to ask leave to withdraw the amendment. 
 Amendment, by leave, withdrawn. 
 Clause 2 ordered to stand part of the Bill.

Clause 3 - Further provision about the Regulator

Question proposed, That the clause stand part of the Bill.

Malcolm Wicks: Clause 3 should be read in conjunction with schedule 1, and with clause 1, which establishes the new regulatory body. The regulator will be in place, subject to the passage of the Bill, from April 2005. Clause 3 and schedule 1 make provision about the terms of appointment and remuneration of members, the appointment of the chief executive and other staff, the proceedings of the regulator and its funding and accounts, and its status, liability, members and staff.
 I shall deal with each part of schedule 1 in turn. Part 1 allows that the Secretary of State will determine the terms and conditions, and remuneration, of the members of the board. No member of the pension protection fund staff is eligible for appointment as a member of the regulator. References in the relevant clauses to executive members of the regulator's board mean the chief executive and those members appointed from the staff of the regulator. Accordingly, any reference to non-executive members is to the remaining members, including the chairman. We shall discuss the purpose and function of the non-executive members later. 
 It is worth pointing out that we chose this structure for the regulator to ensure consistency with the recommendation of the Higgs report on the role and effectiveness of non-executive directors. It is worth emphasising that Higgs's recommendation applies to corporate bodies of publicly listed companies, but we believe that his principles of good governance extend equally to Government bodies, such as the pensions regulator. Therefore, we propose to adopt the recommendations where they are appropriate. 
 Part 2 of schedule 1 defines the staff of the regulator and makes detailed provisions for the proper appointment of the chief executive by the Secretary of State. Part 3 covers the details of the membership of the determinations panel of the regulator. We shall discuss that in more detail when we consider clauses 10 and 11, which relate to the panel. 
 Part 4 is concerned with the regulator's ability to set up committees and sub-committees for any purpose connected with its functions. In most cases, those sub-committees may include individuals who are not members of the committee, but that does not apply to either the non-executive committee or the determinations panel. The regulator can also authorise any member of its staff or any committee to carry out any of its functions; part 4 of schedule 1 covers that. Again, that provision does not extend to the determinations panel or to the functions of either the panel or the non-executive committee. 
 The ability to form sub-committees and to delegate functions will ensure that tasks can be carried out at the appropriate level. That will ensure the operational effectiveness and efficiency of the regulator. The regulator's power to delegate can be altered by regulations if necessary; again, part 4 covers that. Part 5 is concerned with the regulator's funding and accounts and the appointment of the Comptroller and Auditor General as auditor. Part 6 establishes the status and liability of the new body. 
 Each of these provisions is an important building block, forming part of a sound administrative and financial structure for the regulator, and establishing the appropriate relationship to a non-departmental public body between the regulator and the Secretary of State. I beg to move that clause 3 and the associated schedule 1 stand part of the Bill.

Steve Webb: On a point of order, Mr. Griffiths. I apologise for being rusty about procedure, but is it in order to move that clause 3 and schedule 1 stand part of the Bill together? It is my understanding that as we are debating amendments to schedule 1, we cannot move that it stands part of the Bill at this point.

Win Griffiths: That is correct.
 Question put and agreed to. 
 Clause 3 ordered to stand part of the Bill.

Schedule 1 - The Pensions Regulator

Malcolm Wicks: I beg to move amendment No. 72, in
schedule 1, page 166, line 22, leave out sub-paragraph (4).

Win Griffiths: With this it will be convenient to discuss Government amendment No. 73.

Malcolm Wicks: Amendment No. 72 is a technical amendment that removes a superfluous sub-paragraph. Paragraph 11(3) requires that at least one person on the appointments committee
''must be a person who is not a member of the Regulator.''
 Sub-paragraph (4) allows that a person on the appointments committee 
''may be a person who is not a member of the Regulator.''
 Allowing on that committee people who are not members of the regulator is already achieved by sub-paragraph (3), so sub-paragraph (4) is unnecessary. 
 Amendment No. 73 is a similar technical amendment. It ensures that it is clear that where the 
 regulator delegates any functions to any member of staff or committee—save the determinations panel and the appointments committee—they are none the less exercised on behalf of the regulator. 
 Amendment agreed to.

Malcolm Wicks: I beg to move amendment No. 74—

Win Griffiths: Order. I have just learned that we have got the groupings in the wrong order.

Kevin Brennan: I beg to move amendment No. 172, in
schedule 1, page 168, line 14, leave out 
 'and any corresponding provisions in force in Northern Ireland'.

Win Griffiths: With this it will be convenient to discuss the following:
 Amendment No. 173, in 
schedule 1, page 168, line 34, leave out from 'function' to 'or' in line 36.
 Amendment No. 174, in 
schedule 1, page 169, line 17, leave out 
 'or any corresponding provision in force in Northern Ireland'.
 Amendment No. 175, in 
schedule 1, page 169, line 20, leave out 
 'or any corresponding provision in force in Northern Ireland'.
 Amendment No. 176, in 
schedule 1, page 173, line 38, leave out from 'Act' to end of line 39.
 Amendment No. 177, in 
schedule 1, page 174, line 1, leave out 
 'or any corresponding provision in force in Northern Ireland'.
 Amendment No. 178, in 
schedule 1, page 174, line 4, leave out 
 'or any corresponding provision in force in Northern Ireland'.
 Amendment No. 160, in 
clause 4, page 2, line 21, leave out from 'Act' to 'and' in line 22.
 Amendment No. 161, in 
clause 9, page 4, line 36, leave out from 
 'or in any corresponding provision in force in Northern Ireland'.
 Amendment No. 162, in 
clause 34, page 21, line 12, leave out from sub-paragraph (iii).
 Amendment No. 163, in 
clause 34, page 21, line 27, leave out from '(c.49)' to end of line 32.
 Amendment No. 164, in 
clause 52, page 33, line 24, leave out 
 'or any corresponding provision in force in Northern Ireland'.
 Amendment No. 165, in 
clause 52, page 34, line 6, leave out 
 'or any corresponding provision in force in Northern Ireland'.
 Amendment No. 166, in 
clause 76, page 49, line 17, leave out 
 'or any provision in force in Northern Ireland corresponding to this Act'.
 Amendment No. 179, in 
schedule 4, page 181, line 37, leave out 
 'or any corresponding provision in force in Northern Ireland'.
 Amendment No. 180, in 
schedule 4, page 182, line 16, leave out from first 'function' to end of line 17.
 Amendment No. 181, in 
schedule 5, page 191, line 10, leave out 
 'or any provisions in force in Northern Ireland corresponding to this Act'.
 Amendment No. 167, in 
clause 87, page 54, line 28, leave out from 'Fund)' to end of line 29.
 Amendment No. 168, in 
clause 156, page 98, line 2, leave out 
 'or any corresponding provision in force in Northern Ireland'.
 Amendment No. 169, in 
clause 156, page 98, line 18, leave out 
 'or any corresponding provision in force in Northern Ireland'.
 Amendment No. 170, in 
clause 170, page 108, line 15, leave out 
 'and any corresponding provisions in force in Northern Ireland'.
 Amendment No. 171, in 
clause 233, page 156, line 35, leave out paragraph (e).
 Amendment No. 3, in 
clause 246, page 162, line 46, after 'England', insert 'Northern Ireland'.
 Amendment No. 4, in 
clause 246, page 163, line 1, leave out from beginning to end of line 22.

Kevin Brennan: The amendments have been tabled by my hon. Friend the Member for North-East Derbyshire (Mr. Barnes) because of his concern that the Bill refers specifically to England, Scotland and Wales but not to Northern Ireland. I move the amendment on behalf of my hon. Friend to hear the Government's explanation as to why the Bill is set out in that way and does not apply in full to Northern Ireland.

Malcolm Wicks: Despite my initial confusion I was grateful for the rest, Mr. Griffiths, but here we go again. My hon. Friend, on behalf of a colleague, has raised an important point about how the Bill relates to Northern Ireland. It might help if I set out the constitutional situation as it applies in Northern Ireland because, in essence, that is what the Bill follows.
 Social security and pensions are transferred matters under the Northern Ireland Act 1998. Northern Ireland has its own body of social security and pensions law. If the Northern Ireland Assembly were not suspended, provision in relation to Northern Ireland would be a matter for the Northern Ireland Executive and the Assembly. While the Assembly is suspended, provision for Northern Ireland is by way of Order in Council under the Northern Ireland Act 2000. The intention is that an Order in Council will replicate the provisions of the Pensions Bill for Northern Ireland. That will maintain the long-standing policy of parity in that area, but at the same time maintain the integrity of the separate Northern Ireland body of law. 
 Clause 247 sets out the detail of how the Order in Council is introduced. In the event of a return to devolved government, provisions for Northern Ireland will be a matter for the Assembly. In line with established practice in the pensions field, some of the provisions of the Bill extend directly to Northern Ireland. That includes, for example, those relating to the establishment of the pensions regulator, which will operate throughout the United Kingdom. The same is true of the pension protection fund, OPRA and the Pensions Compensation Board. Those bodies are established on a UK-wide basis, but their functions are bestowed by Westminster for Great Britain, and by Northern Ireland legislation in the Province. I understand the reason for tabling the amendment but, in the light of my explanation, I hope that my hon. Friend will withdraw it.

Kevin Brennan: I thank my hon. Friend for that explanation, which has helped to clarify the point. Therefore, I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Amendment made: No. 73, in 
schedule 1, page 169, line 3, leave out 'such of the Regulator's' and insert 
 ', on behalf of the Regulator, such of its'.—[Malcolm Wicks.]

Malcolm Wicks: I beg to move amendment No. 74, in
schedule 1, page 169, line 35, after 'power' insert 'by direction'.

Win Griffiths: With this it will be convenient to discuss Government amendments Nos. 75 and 76, 82, 46, 53 and 54, 91 to 93, 95, 97 and 98 and 100.

Malcolm Wicks: The amendments ensure that it is clear in the Bill how the regulator should exercise the powers conferred on it by other pensions legislation, and that those powers should be exercisable by the normal or special procedure. The Pensions Act 1995 provides that powers can be exercised in three ways: by order, by direction, or by notice in writing. The amendments follow that same style.
 The first set of amendments correct drafting errors and ensure that the regulator's powers will be exercised by direction. Amendments Nos. 53, 75 and 91 apply to the granting of an extension of the period under section 99(4) of the Pension Schemes Act 1993, within which the trustees or managers of a scheme are to carry out certain duties. Amendments Nos. 54, 76 and 92 apply to extending the period for compliance with a transfer notice under section 101J(2) of the 1993 Act. Amendments Nos. 46, 74, 82 and 100 concern refusing to register a scheme as a stakeholder scheme, or removing it from the register in accordance with section 2(3) of the Welfare Reform and Pensions Act 99. 
 Amendment No. 95 will ensure that the regulator's power will be exercised by order when the regulator is exercising its power to vest property in trustees and is removing or appointing trustees under section 9 of the 1995 Act. Amendment No. 97 will ensure that the regulator's power will be exercised by order when the regulator is exercising its power to vest property in 
 trustees and is disqualifying trustees under section 30 of the 1995 Act. 
 Amendment No. 93 provides that the regulator must exercise the power to require a person to pay a penalty for contravening regulations made under section 168(4) of the 1993 Act by a notice in writing. Amendment No. 98 will allow regulations to be made, so that applications under section 69 of the 1995 Act, which deals with applications to modify the scheme for specific purposes that are made by ''competent persons'' to the regulator, can be dealt with by standard procedure as set out in clause 70. There are inherent safeguards built into that procedure. 
 It is important to show by what method powers should be exercised, as any power exercised by order overrides any scheme rules if it is in conflict with them by virtue of clause 230. Therefore, orders are used in the case of a power that may affect scheme rules, such as vesting property in appropriate trustees, winding up a scheme or appointing a trustee.

George Osborne: May I begin, as this is the first time that I have spoken in this Committee, by saying what a pleasure it is to serve under you, Mr. Griffiths? I hope that I will have only a minor part in the Committee; I am merely the understudy to my hon. Friend the Member for Eastbourne. However, I thought that I should say something to justify the time that I have spent here this morning.
 I thought that it would be fair to make the following general observation. The Minister is moving various amendments, all of which seem perfectly reasonable; we do not have a problem with them. However, they raise the question of why they are being moved now. The Government have had a long time to prepare the legislation. That preparation has been one of the most drawn-out processes that I have been aware of under this Government. The Green Paper was published in December 2002 and the White Paper was published last June. The issues have been discussed for the last three or four years. It seems strange that the Government have managed both to make it a long drawn-out process and to produce a rushed job; that is quite a feat. 
 Why did the Government not get the Bill right when they first produced it, especially given that they have had so much time to prepare it, and why do they have to introduce the amendments now?

Malcolm Wicks: The explanation has two parts. The first relates to the sheer complexity of the measures, and the need to relate the proposals to other legislation. The speech to which I have just treated the Committee illustrates that complexity. We are dealing with other areas of law relating to insolvency, and they are equally complex. Also, we are ambitious in our proposals; the new regulator is an ambitious project. The pension protection fund, as an innovation and a new institution, is even more ambitious. There is nothing like it in this country, and it is high time that there was. The hon. Gentleman raises a perfectly fair point, as we shall be subjecting colleagues to a range of Government amendments.
 The second part of the explanation is that if all other things were equal we would have approached the legislation in a more timely manner. If all other things were equal, we might have published a draft Bill, or have taken more time on working on the fine print of the Bill, so that we would not be subject to the amendments. I sincerely apologise to the Committee for the fact that we are discussing a Bill—I had better not describe it as a work in progress—that needs substantial amendments. I genuinely apologise for that; the Committee will be detained, and that is not what I would have wanted. 
 I used the phrase, ''if all other things were equal''. All other things are not equal. Industry, our work forces and our communities demand the pension protection fund tomorrow, not in April 2005. I do not meet anyone who says, ''Take more time; let us have the protection in 2006 or 2007.'' The big debate is about whether the legislation could be retrospective; we do not feel that it could be. We are considering the arguments about workers who have already been disbenefited. 
 There is a great thirst for social justice out there. In particular, we should end the scandal—and it is a scandal—in which workers who have contributed to pension schemes all their working life can suddenly find that the company goes bust, despite their hard work and their reasonable expectation of a decent retirement with a decent occupational pension. Their hopes go bust along with the company. I have talked to workers affected; sadly, sometimes their health and family life are affected too. 
 Although I apologise for the amendments, I do not apologise for the fact that we are bringing forward a measure that needs amendment but that we have every opportunity of putting into operational practice by spring next year. If we delayed for a year, we might have had a more perfect text to present to the Committee. That would have made our lives easier, but by dealing with the matter now, we stand to make the lives of British people and workers easier from April next year.

George Osborne: What the Minister says about the pension protection fund is perfectly reasonable. There is huge demand from the constituents of Government and Opposition Members to introduce that. It is a new institution and we are starting from scratch; the Minister is absolutely right.
 However, at the moment we are not discussing that, but the pensions regulator. The idea of having such a regulator has been around for a considerable time. The Pickering report first proposed it in 2002. The Davis report, the Government's own quinquennial report, was also published in 2002. I do not want to detain the Committee; I simply want to make the point that the amendments are about a proposal that has been discussed in draft for a long time and that the valid points that the Minister makes about the pension protection fund do not apply to the first part of the Bill.

Malcolm Wicks: I shall explain briefly. We have been working on the Bill as a whole. The concept of the pension protection fund came later to the agenda
 than the concept of a regulator. There are cross-over points between the roles of the regulator and those of the pension protection fund. Again, I apologise for the inconvenience; no doubt I will express that sorrow on more than one occasion. However, that is the explanation that I can offer.

Kevin Brennan: I do not think that the Minister will have to express his sorrow on more than one occasion. The hon. Member for Tatton (Mr. Osborne) has made it clear that he perfectly understands the necessity for Government amendments to the pension protection fund. When we reach that stage of the Bill, the Minister will not have to apologise any further.

Nigel Waterson: I was not intending to contribute on this point. However, it is important and we might as well deal with it now. The Occupational Pensions Regulatory Authority was set up under 1995 Act; it was established on 1 April 1996, but it only became operational on 6 April 1997. One cannot say that that era was more leisurely than ours. There were probably good reasons for that delay. Setting up a regulator from scratch is quite complicated. This is the first question—has the Minister reflected on whether, having taken a long time to produce the Bill, the Government are trying to do everything in too much of a hurry? The second point is about compensation, which he mentioned. The then Government bought themselves time by working out a pragmatic way of dealing with the immediate problems of Maxwell pensioners who faced destitution, so that the big issues could be examined more carefully in a longer time scale.
 Amendment agreed to.

Nigel Waterson: I beg to move amendment No. 121, in
schedule 1, page 172, line 25, leave out paragraph 30.
 The amendment deals with a small point but one on which I should be grateful for the Minister's help. I can understand the need to provide that the validity of any of the regulator's proceedings will not be affected by a vacancy among its members. Vacancies will occur 
 for whatever reason—death, serious illness or someone's removal along the lines that we discussed a few minutes ago. However, how can it be right to legislate for the validity of proceedings when there has been a defect, as covered in paragraph 30(b) and (c), 
''in the appointment of any member of the Regulator or of any of its committees, or . . . in the appointment of the Chief Executive''?
 Does that not provide something of a blank cheque and potentially prejudice the rights of those who are subject to proceedings that would be invalid but for the paragraph? It is a small but important point.

Malcolm Wicks: The amendment would withdraw a provision relating to the validity of the regulator's proceedings. The paragraph in question states that the validity of proceedings is not to be affected by vacancies on the board of the regulator or its committees or by any defect in the appointment of members of the regulator or of the chief executive. The provision replicates paragraph 15 of schedule 1 to the 1995 Act, which has operated successfully for the Occupational Pensions Regulatory Authority. It is a standard legal safeguard to ensure that the regulator can continue to protect against members' interests, even if, for example, a member dies or a particular appointment had a technical defect.
 With that explanation, I ask the hon. Gentleman to withdraw the amendment.

Nigel Waterson: I am grateful for that explanation, but leaving aside the vacancy point, which I conceded at the outset, I am still concerned that the provision may encourage sloppiness on the part of the regulator. I am also concerned about how people may be affected by defects, which the paragraph says are all right. I will not pursue the amendment to a vote, but I still have concerns. I beg to ask leave to withdraw the amendment.
 Amendment, by leave, withdrawn. 
 Further consideration adjourned.—[Margaret Moran.] 
 Adjourned accordingly at twenty-four minutes past Eleven o'clock till this day at half-past Two o'clock.